TELSTRA has been accused of taking shortcuts which exposed people to dangerous asbestos fibres, as comparisons with Labor's disastrous pink batts scheme threaten to derail the $37.4 billion National Broadband Network.

Senior Labor leaders last night attempted to absolve themselves from blame, as unions called on Telstra to establish a $100 million "James Hardie-style" fund for affected workers and residents.

It comes after a number of homes in Sydney's west were covered in asbestos dust during a sub-contractor's remediation works on old Telstra cable pits in preparation for the NBN rollout.

"These pits and ducts are owned by Telstra and it is their responsibility to get them ready for the NBN rollout in a safe and secure way," Prime Minister Julia said in Question Time. "I do want to emphasise there are no shortcuts when dealing with asbestos. All safety procedures must be adhered to."

Communications Minister Stephen Conroy avoided directly answering a question about whether he agreed with Communications Electrical and Plumbing Union official David Mier's comparison of the NBN rollout to the failed pink batts insulation scheme, blamed for four deaths and numerous house fires.

"Telstra has acknowledged that the handling of the material has been insufficient, hasn't followed procedure and requirements," Senator Conroy replied.

NBN cable roll out in the streets of Penrith / Pic: Stephen CooperSource: The Daily Telegraph

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Work has been suspended on the site in Hornseywood Ave, Penrith, and two families are being put up in temporary accommodation after Service Stream - a company subcontracted by Telstra to work on rolling out the NBN - dug into pits that were found to contain asbestos.

Penrith mayor Mark Davies last night slammed Telstra's management of the crisis, saying council first wrote to Telstra three weeks ago over residents' concerns that Service Stream workers had left exposed asbestos on their front yards.

"(Telstra) indicated to us that they were remediating and that it was all under control but after that we became nervous that it wasn't happening the way it was supposed to," Mr Davies said.

"You have to give them a bit of time to get that happening, but it became clearer as time went on that we were not seeing what we thought we would be seeing.

"Now they are doing their very best but my criticism is that they were slow off the mark and that was unacceptable."

200 specialists are being deployed to NBN sites around the country following a work ban amid asbestos fears.

Mr Davies said affected residents had attended a council meeting on May 20 to complain about the asbestos.

"That's when we really understood that it was young families. There were some young babies, young children," he said. "The asbestos was noted that it was on garbage bins, on the front lawn (and) I think there was a trace on the carpet. We asked Telstra to come to the council meeting. They said they would and they didn't turn up."

As the federal workplace safety authority Comcare last night confirmed it was investigating a related asbestos incident in Greenacre, Telstra chief operating officer Brendan Riley confirmed the company would now take ownership of all remediation - with "people on the ground doing the oversight from now onwards wearing Telstra badges".

"I think in ... Penrith we had a clear situation of a contractor not following the standard process and procedure for asbestos handling. It wasn't picked up by our contractor, nor was it picked up by our team," he said.

"One site is one too many, so that's unacceptable as far as we are concerned. We do have to deal with staff who don't follow safety procedures and we just don't tolerate it."

Mr Riley confirmed potentially thousands of pits around the nation may house dangerous asbestos fibres.

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Comments on this story

earn it Posted at 9:51 AM May 31, 2013

Govt IS responsible. Govt started the NBN. Govt employed the contractors. Govt cant wash hands and say **Not my fault**. This govt has never been at fault for anything according to its statements. Always someone elses fault. I hold this govt as responsible for the debacle.

Ray of Bris Posted at 9:45 AM May 31, 2013

Better that the problem was found now rather than later. Sorry if you were one of the small number of houses affected, Telstra and the government should do everything to help you. No point blaming the NBN or even Telstra at that time - asbestos was not a recognised problem prior to 1990.

David Mckenzie of Australia Posted at 9:41 AM May 31, 2013

MORE LIES from these inept people no disclosure and more lies when will Australians Wake up

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